What is Conservation Easement?
A conservation easement is a voluntary donation by a landowner to a qualified conservation organization (i.e., a land trust or governmental agency) to protect unique characteristics of land, such as agricultural, open space, scenic, recreation, historic or ecological uses. A landowner retains actual ownership of the land protected by the easement and may sell it or pass it on by gift or will.

In placing an easement on land, the owner relinquishes certain rights associated with the property. For example, the landowner may lose the right to subdivide a tract for residential development. The land is protected, however, for future generations and the landowner knows that the land will be maintained as planned in perpetuity. All future owners of the land are bound by the easement terms because the agreement is recorded in the land records.

Why Donate an Easement?
Many landowners use conservation easements as a means of protecting family lands for future generations. Others use easements as a tax planning device. Restricting land use by a conservation easement presents federal and state tax benefits, as the value of a qualified easement may be deducted from federal and/or state income taxes. In Virginia, there is also a substantial tax credit that may be used by the landowner or transferred to another Virginia taxpayer.

In addition, since a conservation easement may reduce the market value of land, federal and state estate and gift, as well as local real estate taxes, may also be reduced. The value of an easement, for tax purposes, is typically the difference in the land's fair market value as appraised before and after donation of the easement. In unusual cases, valuations may be based on comparable sales of easements or property subject to easements.

Who decides what restrictions an easement contains?
Working together, a landowner and the easement holder negotiate restrictions that will apply to a particular tract of land. The language of the easement agreement is crucial to the transaction, as it reflects the landowner's interests and any limitations the easement holder requires regarding the future use of the land. For example, an easement agreement may outline uses of the land, construction of any new buildings, acres to be protected, permitted planting or harvesting of trees or crops, public access to the land (usually none), or prohibitions on changes to existing structures. The easement agreement must also comply with state and federal tax laws. The easement holder is obligated to monitor and maintain any conditions contained in the easement agreement in perpetuity.

Who Holds Conservation Easements?
A nonprofit tax-exempt conservation organization such as a qualified land trust or conservancy may hold an easement. In addition, federal, state or local governmental entities may serve as easement holders. Virginia has numerous local land trust organizations which are focused on protecting land in particular geographic areas. Frequently, the land trusts hold easements jointly with the Virginia Outdoors Foundation (VOF), a statewide land trust established in 1966. VOF currently holds easements on more than 290,000 acres in Virginia and has access to the Commonwealth's resources to ensure that restrictions placed on land under a conservation easement are enforced perpetually.

Our Firm's Easement Services
McCandlish Holton has a team of lawyers who advise Virginia landowners on all aspects of donating a conservation easement. We fully educate landowners on the advantages and disadvantages of placing an easement on land, identify appropriate easement holders, draft all easement documents and determine whether financial assistance is available for expenses associated with the donation. We also coordinate the services of appraisers, land surveyors, soil scientists, accountants and other professionals involved in securing an easement. Our most significant contribution, however, is our ability to negotiate the easement terms and restrictions with the easement holder while assisting landowners in achieving state and federal tax benefits for their conservation easement donation.